It says existing allowances for early release for medical treatment, funeral costs and emergency mortgage payments, are sufficient.
ISA warns that “further relaxing the rules around access could significantly aggravate the liquidity pressures that super funds face, potentially accelerating the selling of assets and the realisation of losses, creating further liquidity pressures across the economy, and exacerbating the current market conditions”.
The numbers are changing daily but the super balances of most Australians will have taken a hit from the wild swings occurring on the sharemarket.
Anxious members have been switching to cash, although super funds and financial advisers say this is unwise in many cases.
“During the global financial crisis, industry super funds played a role in buffering the Australian economy from the worst of the downturn and its steady stream of capital helped underpin the economic activity that lifted the Australian markets out of the slump,” Mr Dean said. “It’s a role industry super funds could play once again.”
In 2014, the final report of the Financial System Inquiry led by banker David Murray found that Australia’s unleveraged super system provided stability during the global financial crisis.
“The absence of borrowing enabled the superannuation sector to have a stabilising influence on the financial system and the economy during the crisis,” the report said. “Restricting leverage in the sector will be important for mitigating future risks.”
The inquiry recommended banning limited recourse borrowing by self-managed super to prevent the build-up of risk in the system but the Coalition government rejected the idea.
Last year a report by the Council of Financial Regulators and Australian Tax Office again raised concerns about the issue but the government said levels of borrowing were too low to worry about.